Balikbayan Real Estate Investments on the upswing!
06/18/2006

The top international executive of one of the Philippines' leading property developers believes that now is the greatest time to invest in the country despite the usual political and economic problems.

"Many people have always said that we might be an Argentina, we might be a Mexico. We have never been like that. All through the years, through different political administrations, the Philippines has always been the Philippines and there is no best time to invest but in a time where things are still on the way up.

When things are already buoyant, that's already too late. It is when people have been taking notice. That's what Las Vegas was ten years ago, or probably LA twenty years ago. Today, that's where the Philippines is," Rex Mendoza, Ayala Land International Sales, Inc. (ALISI) President shared.

"If we look at the political side, administrations come and go but there is always a story line for the Philippines because it's an economy that is now getting pushed up and we have gotten upgrades from Moody's and Standard and Poor's.

If we are into that upswing and you don't ride with it, it might be too late if we wait another few years. The time to do it is now because investments are made when the bandwagon is not there yet," he added.

Because of this, a lot of Philippine property developers have crossed the Pacific to market their products to Filipino-Americans and balikbayans, and as a top-ranking executive of one of the most reputable developers in the country, Mendoza issued one warning that could best be summarized in two Latin words: caveat emptor.

"It's a great opportunity to invest in Manila and the properties there but we have to be wary about getting into these investments. Any real property purchase is a long-term investment and because of that reason, people have to be conscious about long-term values and looking at considerations, which are normally unseen," Mendoza told the Asian Journal in an interview.

Mendoza finds its scary that some people can come up with brochures and "because they know you cannot go to Manila to inspect, you might get yourself into situations where you see something which won't be delivered."

He offered some tips to balikbayans who might be looking at the different property developments being offered to them right now. He said that balikbayans need to look at the name of the developer, and check if that developer has a track record and with a string of great developments that they have serviced and delivered on and has value over time.

Mendoza also advises balikbayans to ask questions: "where is this place, specifically, where is the location, streets, general directions; what materials are going to be used, if they are buying the house itself. If it's a condominium unit, what are the floors going to be made up of, how many square meters."

Before prospective clients even take money out, Mendoza suggests that they have to know: are they going to get a title or is it going to be a share or is it going to be a condominium certificate. What is the ownership documentation and what is required to be able to get it in their name?

Aside from getting a developer's track record, Mendoza also adds that it is also important to make sure that clients know exactly what they are going to own, "They need to know what they are paying for. Is it a fractional share or is it full house ownership?"

"They have to be able to ask questions. It's not prudent to make decisions based on a drawing. Anybody can run great graphics right now. One thing that you can see in these brochures are caveats as well so be careful," he said.

In the government's efforts to boost investments and remittances coming from Filipinos outside of the Philippines, calls have been made to the more than seven million Filipinos living outside the country to consider buying properties in the Philippines.

Here in the United States, Ambassador Albert del Rosario and the various Philippine Consulate General's offices have tied up with various Philippine property developers and arranged road shows for them so that Filipino-Americans could get a better look on what they have to offer.

Asked about his prediction on how long this boom on Philippine property is going to last, Mendoza quipped, "This is just the tip of the iceberg. We've got a long way to go."

The Asian financial crisis in 1997 caused the property sector to suffer a slump but through the years, the industry has been making a slow but steady climb.

But beyond glossy brochures and catchy presentations, Mendoza is firm in his advise to Fil-Ams that they should at least do their homework first before embarking on something that could probably change their lives forever.

"It's a long-term investment. You have to put your money into something that will give you an investment value that you'd want to hold on to, you'd want to be able to have options in the future, whether you are going to live in it, or sell it later or lease it out, what are your options," Mendoza explained.

For him, Filipinos are really real estate investors and proof of that is our kababayans investing in properties in Las Vegas, San Francisco and here in Los Angeles.

"We have to admit though that these markets are quite over-heating and as investors, they need to go where the upside really is. Any investor or investment professional will tell you that the Asian market is on an upside. In Asia, why not go for something that is familiar to balikbayans, which is our home country.

It's a way of giving back to your country and your investments will help improve certain industries, create jobs and uplift the economic activity there. Put forth an investment that is going to be sound and will earn you money and provide options for your future," Mendoza said.